Global oil markets are currently stable, Kuwait's Oil Minister Bakhit al-Rashidi said on Tuesday, adding that he expects such stability to continue until the end of the year, despite sanctions on Iran.
Rashidi told reporters in Kuwait City that the upcoming Organization of the Petroleum Exporting Countries (OPEC) meeting next month will look at whether the oil market needs more crude and if there is a build up in inventories.
OPEC and its allies are set to meet in Vienna on December 6-7 to decide their oil supply policy and agree on a long-term mechanism to manage the market beyond 2018.
Meanwhile, Iran’s Shana news agency reported that Iran’s oil minister Bijan Zanganeh wrote to OPEC’s secretary general calling for two committees tasked with monitoring a deal between OPEC and other countries led by Russia to be scrapped.
“Some OPEC members of these two committees have clearly taken sides with the (United States) in imposing its unilateral and unlawful sanctions against... Iran,” Shana quoted Zanganeh as saying.
He noted that the committees should immediately stop their work.
The Joint Ministerial Monitoring Committee (JMMC) and Joint Technical Committee (JTC) were set up as part of a deal between OPEC and other producers led by Russia in late 2016 to curb oil supplies by some 1.8 million barrels per day (bpd).
The JTC prepares regular reports on the oil market which inform the group’s decisions.
At their meeting in June, OPEC and non-OPEC agreed to boost output by returning to 100 percent compliance with supply cuts that took effect in January 2017, after months of underproduction by some member countries including Venezuela and Angola.
Saudi Arabia said the move would translate into an output rise of around 1 million bpd.
On Tuesday, Iran indicated it had so far been able to sell as much oil as it needs despite US pressure, but it urged European countries opposed to US sanctions to do more to shield Iran, as Russia and Turkey also voiced their objections.
The US on Monday restored sanctions targeting Iran’s oil, banking and transport sectors and threatened more action to stop what Washington called its “outlaw” policies; steps that Tehran called economic warfare and vowed to defy.
“The Americans constantly said they would reduce the sale of Iran’s oil to zero but I have to say that, so far, we have been able to sell our required amounts of oil,” Tasnim news agency quoted Iranian Vice President Eshaq Jahangiri as saying.
Iran’s oil exports have fallen sharply since US President Donald Trump said at mid-year he would reimpose sanctions on Tehran, but with waivers in hand the country’s major buyers are already planning to scale up orders again.
The original aim of the sanctions was to cut Iran’s oil exports as much as possible, to quash its nuclear and ballistic missile programs, and curb its support for militant proxies.
But the exemptions granted to Iran’s biggest oil clients: China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey, allow them to import at least some oil for another 180 days and could mean exports start to rise after November.
This group of eight buyers imported over 80 percent of Iran’s oil exports last year.
Reuters quoted regional director for the Middle East and Africa at the Economist Intelligence Unit Pat Thaker as saying that the US decision to grant waivers represents a departure, for now, from the stated aim of reducing Iran’s oil exports to zero.
As a result of pre-sanctions pressure by Washington, Iran’s oil exports in November may not exceed 1 million to 1.5 million bpd, according to industry estimates.
Japan’s trade minister, Hiroshige Seko, said on Tuesday that Japanese buyers of Iranian oil were expected to resume imports after the country received a waiver from US sanctions.
S&P Global Platts reported on Tuesday that South Korea would be able to take around 4 million barrels a month of Iranian crude and condensate under a US sanctions waiver.
Trading sources said several Asian oil importers were looking to increase their orders for Iranian oil soon.
Two sources familiar with the matter told Reuters that the country would be allowed to buy 360,000 bpd of Iranian crude during the exemption period, which would be about half the daily average China has been importing from Iran since January 2016.
One of the sources said the US had attached some strings to the import allowance, including counter-party disclosures and laying open settlement methods, which were being evaluated before placing new orders with Iran.
The wide-ranging exemptions have reduced fears of a supply shortage, taking pressure off companies, governments and economies around the world that have struggled with the surging cost of fuel.
Trump said on Monday he wants to impose sanctions on Iran’s oil gradually, citing concerns about shocking markets and causing global price spikes.
This has served to take the sting out of the sanctions threat, which helped to lift international benchmark Brent crude futures to four-year highs of almost $87 a barrel in early October.
Brent prices are now about 15 percent lower than that peak and have barely budged over the last two sessions.
Iran’s oil exports rose sharply after the previous round of sanctions were lifted in early 2016. Including condensate, an ultra-light form of crude, shipments peaked around 3 million bpd in mid-2018, according to trade data in Refinitiv Eikon.
